- The US would impose a 25% tariff on steel and aluminum imports starting in March.
- Australia’s Prime Minister said that the country might be exempted from the new tariffs.
- Traders are looking forward to the US consumer inflation report.
The AUD/USD outlook shows a resilient Australian dollar amid reports that Australia might be exempted from Trump’s steel and aluminum tariffs. Meanwhile, the dollar held steady against most major peers after Trump’s administration confirmed more tariffs starting in March. At the same time, market participants are looking forward to US inflation figures.
–Are you interested in learning more about STP brokers? Check our detailed guide-
Trump announced on Monday that the US would impose a 25% tariff on steel and aluminum imports, boosting the dollar. Furthermore, the president promised to give more details on a looming reciprocal tariff. These duties have increased concerns about trade wars, hurting risk appetite. As a result, market participants have dumped risky assets and bought the dollar.
However, the Australian dollar strengthened after Australia’s Prime Minister said that the country might be exempted from the new tariffs. At the same time, data on Tuesday revealed that business confidence in Australia jumped in January amid increased hopes of an RBA rate cut.
Meanwhile, traders are looking forward to the US consumer inflation report due on Wednesday. Economists expect monthly inflation to increase by 0.3%. Meanwhile, the annual figure might hold steady at 2.9%. An upbeat report will convince the Fed to keep interest rates elevated. On the other hand, soft inflation might increase Fed rate cut expectations.
AUD/USD key events today
- Fed Chair Powell Testifies
AUD/USD technical outlook: Bulls prepare to bounce off the 30-SMA support
On the technical side, the AUD/USD price trades above the 30-SMA with the RSI above 50, indicating a bullish bias. However, the bullish trend paused when the price met the 0.6300 key resistance level. The pause led to a pullback to the 30-SMA support. Here, bulls resurfaced, ready to push the price to a new high.
–Are you interested in learning more about making money with forex? Check our detailed guide-
A break above the 0.6300 resistance will allow AUD/USD to make a higher high, confirming a continuation of the bullish trend. This means the price might retest and break above the 0.6350 level.
On the other hand, if the resistance holds firm, the price might fall below the 30-SMA to target the 0.6200 support level. However, to confirm a new bearish trend, the price must start making lower highs and lows.
Looking to trade forex now? Invest at eToro!
68% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money.
